Tuesday, April 18, 2006

An increase in advertising online

Paul Kedrosky points out that the big marketing budgets of consumer product companies finally are starting to shift online.

Most notable is that Anheuser-Busch will be doing 5% of total ad spend online and Pepsi 5-10%, significant increases from their past budgets.

As Paul says:

To put it in context, packaged goods companies accounted for 11% of the 145-billion U.S. ad market in 2005 -- but they spent just 1.6% of the ad money online last year.

There is ... a lot of room for a major ad-dollar budget shift.

Old habits die hard, but I have surprised by how long it has taken for these massive brand marketing budgets to shift from offline, where it is difficult to track the impact, to online, where measurement and optimization are easier.

Update: Anick Jesdanun at the AP reports that "online advertising set a new record of $12.5 billion last year, a 30 percent increase from the previous high of $9.63 billion in 2004."